The National Disability Insurance Scheme Explained

By David Donaldson | 08 Oct 12
Man in wheelchair wearing red shirt, in black and white scene

This article is part of our October theme on disability rights. To read more on this topic, click here.

Several years ago, a family friend suffered a brain aneurysm. A blood vessel in her brain exploded, resulting in a severe haemorrhage. One minute she was taking a cigarette break with her colleagues, the next she was lying on the ground unable to speak. She is now wheelchair-bound and supervised by carers 24 hours a day. Conversations with her are circular, due to heavily impaired short-term memory. But she is, in one way, extremely lucky.

This friend, thanks to the unpredictable forces of the universe, happened to win what is often referred to as Australia’s cruel lottery. At the time the aneurism occurred, she was at work. As a result, she received workers’ compensation and was able to buy a house near a local health service in the suburbs. Today she lives in her own home and still gets all the care she needs.

What emerges, then, is a patchwork of systems that is costly, inefficient, and above all unfair.

If she had been at home at the time of her injury, however, she would likely have been entitled to nothing.

Under the current system, the level of disability support one receives is in many ways governed by the laws of chance. In some states, you will be eligible for support if you acquire disability as the result of a car accident, in some states you won’t. Accidents that happen at home aren’t covered. And private insurance doesn’t cover the costs of a baby born with a severe disability.

Importantly, this means that effective support can be offered early-on to those for whom there is evidence that early intervention will bring significant benefits.

What emerges, then, is a patchwork of systems that is costly, inefficient, and above all unfair. States manage disability laws and services, and each state system is different. The opportunity to receive proper care and live with dignity is a game of luck based on where you live and how you acquired your disability.

So the government’s proposed National Disability Insurance Scheme, or NDIS, aims to create a fairer and more efficient system. Building on the findings of the government’s Productivity Commission report, the NDIS will replace the hodgepodge of state services and regulations with a national arrangement.

Although the exact details of the scheme are still being worked out, the Productivity Commission recommended the adoption of a national Medicare-style system providing insurance cover for Australians with a significant disability.

The proposed scheme will cover all kinds of services, including accommodation support, respite care, domestic help or community activities, as well as therapies and aids, such as prosthetics or vehicle modifications. It would not be means-tested.

There are currently around 410,000 people in Australia “who have a permanent disability that significantly affects their communication, mobility, self-care or self-management.” One of the key policies of the NDIS is that it will pay for necessary care requirements based on individual circumstances – which of course differ hugely – rather than at a flat rate.

Importantly, this means that effective support can be offered early-on to those for whom there is evidence that early intervention will bring significant benefits. Included in this are those who suffer from autism, acquired brain injury, cerebral palsy or sensory impairments, as well as degenerative conditions such as multiple sclerosis and Parkinson’s disease. Early intervention can significantly improve quality of life for the individual and their family, as well as reducing the long-term costs to the health system.

The projected cost of the NDIS is around $6.5 billion per year. Part of the reason that implementation has dragged on is the significant cost involved, with the federal government and the states arguing over who will pay, despite bipartisan support for the project. To put this cost in perspective, over 2012/13 total Federal Government expenditure is projected to be around $370 billion. Finding the money to pay for the NDIS, as well as the government’s other important new policies, is no mean feat.

The Productivity Commission did note, however, that the NDIS easily passes a cost/benefit analysis, as it will boost GDP by $32 billion by 2050.

The program is to be launched on 1 July next year in the Hunter Valley, Geelong and the Australian Capital Territory, as well as two “cohort” based launches, of South Australian children aged 0-14 and adolescents in Tasmania. While almost all the states appear to be on board at this stage, there are still minor issues to be resolved with the Western Australian government, and major ones with Queensland.

Apart from the feted 2013 launch, so far the only part to which the government has firmly committed is providing $10 million to set up a new advisory committee to begin work on the scheme’s technical aspects, such as a new process to assess the extent of a person’s disability and needs.

Despite the Productivity Commission recommending the NDIS be rolled out from 2014, the government has not committed to a specific timeframe. Nor has it clarified whether it will pursue a Commonwealth-controlled model or what the commission referred to as an inferior federated system, in which states retain control. The Coalition has affirmed its support for introducing the NDIS by 2018.

In the words of Laura Tingle in The Australian Financial Review, the NDIS “will stand with Medicare and the introduction of free university education in the party’s history as a huge policy initiative.” They will no doubt want to get it right.